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A plan to increase by nearly 20% the charges city hall tacks onto new homes will have little, if any, negative effect on the housing market, an outside analysis concludes.

While the hike to development charges may unnerve some homebuilders and developers, the city-commissioned report essentially says there’s nothing to worry about.

“(It’s) unlikely that the proposed DC (development-charge) increase would have a significant long-term impact on the rate of housing construction, or the construction sector as a whole,” says the report by Watson & Associates economists.

While the proposed hike sounds huge — charges on a new home would rise to $28,143 from $23,716 — it would result in only about a 1% increase on the total cost of a home, the report adds.

When the development charge review began, the numbers were much different.

City staff eyed a new rate of $40,344, nearly double what’s charged now, which led to what city finance boss Martin Hayward later described as an “intense” set of deliberations involving developers and citizen advocates.

Last month, the revised increase cited in the new analysis went to politicians. Unanimously endorsed, it’ll be the subject of a public input meeting next week.

But even if there’s no contentious feedback, it doesn’t mean everyone is pleased.

The charges — to help pay for the costs of growth — are waived in some cases to encourage development, including for industry.

Coun. Joni Baechler, a leading voice in such battles, has said that amounts to a subsidy for developers borne by taxpayers.

Londoners pay nearly $15 million a year to cover the costs that would otherwise be paid by developers, if not for those exemptions.

But another veteran councillor believes the residential figure strikes the right balance.

“I think we’re close” to the right figure, Bud Polhill said. “I don’t think there’s going to be much argument about that.”

The charges on commercial properties, however, could be a much bigger concern. They’re set to go up more than 50% — to $265 a square metre, up from $174 — and that irks Polhill.

The Watson & Associates report says the commercial hike will have a “minimal impact” on retail businesses and offices.